Asia Pacific commercial property market grows 27% in H1 2026

The office sector was a key driver of the increase.

Asia Pacific's commercial real estate market gathered pace in the first half of 2026, with investment activity, office leasing and rents strengthening across the region, according to CBRE's 2026 Asia Pacific Real Estate Market Outlook Mid-Year Review.

Commercial real estate investment rose 27% year on year in H1 2026, with gains recorded across most sectors and markets, CBRE said. Office investment was a key contributor, increasing 29%, led by Singapore, while volumes improved in Hong Kong SAR and began to stabilise in mainland China.

CBRE head of capital markets, Asia Pacific, Greg Hyland, said investors were moving beyond recovery mode and increasingly targeting markets and asset classes offering income growth, highlighting Tokyo, Sydney and Singapore as markets where rental growth remains strong.

Office markets also showed resilience despite a tightening supply outlook. New Grade A office completions in mature markets fell 38% year on year in H1, with construction costs and constrained development pipelines expected to limit new supply further.

CBRE said demand remained firm, supported by AI-related occupiers in Singapore, Global Capability Centres in India and continued upgrading to higher-quality office space in mainland China. The consultancy expects leasing activity and rental growth to strengthen through the remainder of 2026.

Ada Choi, head of research, Asia Pacific, at CBRE, said leasing sentiment remained resilient despite geopolitical uncertainty, with demand increasingly focused on premium offices in Tokyo, Hong Kong SAR and Sydney as businesses prioritise talent attraction, workplace quality and long-term performance.

In logistics, leasing demand is expected to remain resilient but increasingly concentrated in modern, well-located facilities. CBRE said the performance gap between prime and secondary assets is widening, while a shrinking development pipeline from 2027 onwards should support firmer rents. Greater Tokyo has particularly strong rental growth prospects, although conditions in India and Australia are expected to remain more mixed.

Retail leasing is also expected to benefit from limited new supply and sustained demand for prime space in H2 2026. CBRE said new-to-market Asian brands and experiential retail are supporting leasing activity, with tight availability expected to underpin rental growth in markets including Tokyo. However, softer non-core demand and pressure on retailer profitability could weigh on selected markets, making prime retail assets the main beneficiaries of changing consumer preferences.

Hotel markets are seeing improving average daily rates, although occupancy growth remains uneven. CBRE said reduced Middle East flight capacity and higher fuel costs have constrained occupancy, while most markets continue to record year-on-year RevPAR gains through higher room rates. Events and concerts are also emerging as important drivers of hotel performance, generating peaks in occupancy and rates and helping stimulate demand during traditionally weaker periods.

Elevated construction costs in developed markets are meanwhile limiting new hotel supply, particularly at the high-end of the market, CBRE said.